A welder cut through part of the too-tall Sunroad building near Montgomery Field in November.

SAN DIEGO –
Sunroad Enterprises and the city of San Diego are resuming their legal battle over a Kearny Mesa office tower designated a hazard because its original height exceeded federal safety regulations.

A trial has been set for Nov. 3 to resolve dueling lawsuits filed by Sunroad and the city in a case that grabbed headlines and caused political tumult last year after the Federal Aviation Administration's designation and the city's order to tear down the building's top two floors.

The litigation was suspended last summer while the city and the development company bickered over the building's height. The building, which sits less than a mile from the runway at Montgomery Field, was lowered in November and is now 80 percent complete.

Lawyers for the city told Superior Court Judge Michael Anello yesterday that they believe a settlement is impossible. They said Sunroad turned down their offer that would require the company to pay $450,000 – half of the city's legal fees associated with the case.

“There has been a lot of time and effort put forth to settle this matter,” said Christopher Garrett, a private attorney hired to represent the city. “At this point I would say there is no prospect for settlement.”

Sunroad lawyers told Anello they still believe an agreement can be reached and requested a settlement conference before another judge. That hearing has been set for March 10.

“Either we will have it resolved or we won't,” Sunroad attorney Steven Strauss said.

What's changing: As construction crews work to finish the building, Sunroad and the city of San Diego resume their legal battle.

The future: A settlement conference is set for March 10 in San Diego Superior Court. A trial has been scheduled for Nov. 3 if no settlement is reached.

The city filed the first lawsuit in 2006 to force Sunroad to comply with the FAA's safety standards, which called for the 180-foot-tall building to be lowered to 160 feet because it posed a hazard to airplanes landing at Montgomery Field in bad weather.

Sunroad then countersued for $40 million last year to recover lost revenue associated with the delay in opening the building, and for reimbursement of the $1.1 million expense of demolition and reconstruction.

In its claim for economic damages, Sunroad argued that the city gave permission to build a 180-foot-tall structure and could not then withdraw approval and demand that the two floors be torn down.

The company contends that city building officials never expressed concern about the height during a lengthy review of its plans.

The city's position is that it was entitled to withdraw its permission and order the building lowered because it was constructed in violation of the FAA's safety laws.

The company grudgingly agreed to lower the building while maintaining that it did not pose a hazard to aircraft. The building could be occupied by May, nearly a year after it was originally scheduled to open.

The dispute traces back to April 2006, two months before the first floor of the building was even started, when the FAA notified Sunroad that its building would be a safety hazard.

Sunroad nevertheless went ahead with plans for a 180-foot-tall tower, saying the city had issued building permits for the structure.

That decision by Sunroad, a wealthy and politically connected company owned by multimillionaire Aaron Feldman, set off nearly a year of argument, defiance and political fallout.

San Diego Mayor Jerry Sanders publicly admitted in May that the city had bungled the permit process that allowed the building to exceed FAA safety standards.

A month later, after quietly trying to find a solution that would allow the building to remain at 180 feet, Sanders finally ordered a halt to construction.